Last week former Prime Minister Helen Clark was
subjected to a scathing review of the United Nations
Development Programme that she has run since 2009.[1] The
evaluation was carried out by her own executive board and
covered the last two years of operation. It paints a picture
of a confused organisation that is failing to achieve its
goal of global poverty reduction despite spending more than
US$8.5 billion between 2004 and 2011. The report was
essentially a performance review of Helen Clark. It warned
that the UNDP had underachieved in a wide range of areas
including failing to properly evaluate the success of its
poverty reduction initiatives, failing to share good ideas
between its 162 country offices, and failing to ensure that
worthwhile pilot programmes were expanded to maximise their
benefits.

According to the World Bank,
the number of people living in abject poverty on US$1.25 or
less a day is continuing to fall across the globe, declining
from 1.9 million in 1981 to 1.3 million today. This number
is expected to continue to fall - not because of programmes
like the UNDP, but because economic growth is lifting people
and nations out of poverty.

In 2001, the
World Bank published a study that examined economic progress
in 92 countries over four decades, searching for the factors
that were responsible for lifting the incomes of the poor to
the greatest degree. In Growth is Good for the Poor,
the authors found that when average incomes rise, the
average incomes of the poorest fifth of society rise
proportionately.[2] This held true across regions, periods,
income levels, and growth rates. They found that factors
responsible for improving economic growth between countries,
such as the rule of law, openness to international trade,
and developed financial markets, benefited the poor as much
as everyone else. While they did find some evidence that
lower inflation and smaller government increased the income
share of the poorest fifth in society over other groups, the
results were inconclusive.

In 2005 a
further World Bank study, Aid and Growth: What Does the
Cross-Country Evidence Really Show?, reinforced these
findings: there was no evidence that aid was able to improve
economic growth – ever.[3] Part of the reason for the
failure of aid to produce any significant long-term benefits
appeared to be that most of the funding either came with
strings attached - dictating that the money must be used in
particular way that sounded good in New York or London but
was largely ineffective in the field - or that it goes to
governments and leads to corruption.

As
Zambian economist Dambisa Moyo explained, “We know that
there is no country - anywhere in the world - that has
meaningfully reduced poverty and spurred significant and
sustainable levels of economic growth by relying on aid. If
anything, history has shown us that by encouraging
corruption, creating dependency, fueling inflation, creating
debt burdens and disenfranchising Africans (to name a few),
an aid-based strategy hurts more that it
helps.”[4]

Helen Clark has hit back at
her executive board, defending her UNDP actions with
‘transformational change’ rhetoric. However,
this has echoes of the Closing the Gaps strategy that her
government introduced into New Zealand in 2000 in order to
close the so-called income gap between Maori and the rest of
society. Closing the Gaps was a misguided policy based on
the notion that income disparity was a race issue. Helen
Clark planned to spend $140 million over 4 years on this
Rolls Royce affirmative action programme to deliver services
based on race instead of need.

But the
policy met strong opposition and was discredited. The Race
Relations Conciliator at the time, Dr Rajen Prasad - who is
now a Labour Member of Parliament - climbed into the debate
claiming that delivering social services through iwi and
other Maori structures would result in discrimination
against non-Maori. Even the Plunket Society joined in,
saying that poor health was linked to lower incomes, not
race. But the nail in the coffin of the policy was a damning
critique produced by the Department of Labour’s senior
research analyst Simon Chapple that showed Maori deprivation
was a socio-economic issue based on factors such as age,
education, skills, and place of residence rather than
ethnicity.[5]

At the time the policy was
launched, Helen Clark said the initiative was in response to
a “strong voice from Maoridom urging that it be
able to take control of its own destiny, determine its own
strategies, and devise its own solutions.” While the
Closing the Gaps policy was abandoned, those same strong
voices from Maoridom did not give up and were clearly
behind Whanau Ora, the $134 million reincarnation of the
policy, that was launched in 2010 as part of the Maori
Party’s confidence and supply agreement with National. New
Zealand First leader Winston Peters is a strong critic of
Whanau Ora, attacking the programme as a “bro-ocracy”
designed to gift taxpayer funding to Maori for family
reunions, gang activities and other “nonsensical
purposes”.

As with overseas aid, such
welfare programmes often do more harm than good. Instead of
pouring funds into questionable schemes, governments should
focus their efforts on lifting economic growth and creating
an environment in which small business can flourish, since
these are the only proven pathways for improving outcomes
for the disadvantaged.

With that in
mind, the comments last week by the outgoing boss of Coca
Cola, that New Zealand’s ingrained anti-corporate
mentality is stifling business growth in this country,
should ring a warning bell.[6] While “big business” has
traditionally been a scapegoat for the union movement, these
days the anti-business mantra is also being promoted by the
environmental movement, and together their influence is
poisoning public attitudes. The problem is that their attack
on business - which is purely political and based on
self-interest - is now damaging the country. With their
anti-business propaganda being parroted by the media, there
is a danger that the public risks losing sight of the
multitude of benefits provided by our bigger businesses. The
contribution they make to our society in terms of providing
secure jobs with good incomes, along with great down-stream
opportunities, is immense. With private sector businesses -
not governments - responsible for improving living
standards, we should be championing business success, not
condemning it.

Late last year, a report
on child poverty in New Zealand was published by the
Children’s Commissioner. It identified 78 recommendations
that it claimed would alleviate “child poverty” in this
country - at a cost of $2 billion.[7]

In
his report the Children’s Commissioner defines
relative poverty as “60 percent of median
disposable household income, after adjustments for housing
costs”. The median disposable household income for a New
Zealand family of four - after paying the rent or mortgage -
is $1,000 a week. That means that any child in a family of
four with a household income of $600 or less a week - after
paying their housing costs - is classified as living in
poverty. Using this definition, the Children’s
Commissioner claims some 270,000 New Zealand children are
living in poverty. But the problem is that as the median
household incomes rises, to say $1200 after housing costs,
so too would the value of relative poverty, to $720 a week -
and 270,000 children would still be classified as living in
poverty, making a mockery of the whole
measure.

The Children’s
Commissioner’s estimates of poverty are based on
relative poverty, not the abject poverty seen
in third world countries. But relative poverty is not
a real measure. Instead it is a political construct that is
used by socialists to justify the on-going redistribution of
wealth, since by its fundamental definition, it can never be
eliminated.

Welfare commentator Lindsay
Mitchell, this week’s NZCPR Guest, has examined the issue
of child poverty in New Zealand looking to identify the
cause. In her article Born on a Benefit, she looks at
the high rates of birth to families on welfare and concludes
that child poverty is largely the result of irresponsibility
– an irresponsibility caused by
welfare.

“The Norm Kirk government of
1973 which bowed to pressure to provide statutory assistance
for mothers who'd lost the support of a partner, would have
been aghast if afforded a glimpse of a future in which
supposedly single woman were allowed, and even encouraged by
some, to breed on a benefit. Twenty two percent of all
babies born in 2011 were on welfare by Xmas. But even
pre-recession, when New Zealand briefly enjoyed the lowest
unemployment rate in the world during 2007, the percentage
only dropped to eighteen. Having babies on a benefit is part
of the New Zealand culture. That's what's primarily driving
this country's child poverty scandal. In a word,
irresponsibility; irresponsibility of the people who produce
the kids, but arguably worse, irresponsibility of the
society that sanctions it.” To read the full article click
HERE

Last year,
Treasury produced a report that looked at income mobility
and deprivation in New Zealand. It found that after seven
years only a quarter of those who were assessed as being in
the bottom income decile were still there.[8] In other
words, three quarters of those in the poorest households
were able to improve their situation. The resulting policy
recommendation was that the government should ensure that
people do not face barriers to improving their
circumstances.

With this in mind it is
interesting to note the German experience, which ten years
ago was grappling with high unemployment. That is until they
realised that the real problem wasn’t the supply of jobs,
but the supply of willing workers. That’s where
mini-jobs came in: “There is special focus on
mini-jobs, contracts that allow a worker to earn 400
euros a month tax-free on the condition that they can be
sacked at any moment. Germans can have as many such jobs as
they like, but only one with the same employer. The official
figures show that, within a year of their introduction,
there were 500,000 more part-time jobs, with a good record
of leading to full-time employment. Youth unemployment was
indeed halved.”[9]

Whether or not the
mini-jobs concept is right for New Zealand, what we
do know is that just as more aid will not cure world
poverty, more welfare will not permanently improve the lives
of the disadvantaged. The government must continue with an
unrelenting focus on growing the economy and creating
opportunities for people to improve their circumstances
through their own efforts.

THIS WEEK’S POLL
ASKS:

Do you believe that the
Children’s Commissioner’s estimate that 270,000 New
Zealand children live in poverty is realistic? Click
HERE to vote

*Read this week's poll
comments daily HERE *Last week 98% of voters believe the
Maori Electoral Option should be abolished- you can read
the comments HERE

The high rate of New Zealand
children born onto welfare gives rise to numerous health and
social problems down the line, not least abuse and neglect.
We now know thanks to a recent Auckland University study
that 83 percent of substantiated child abuse and neglect
cases concern children who appear in the benefit system
before the age of two.

There is an especial problem with
Maori children. Not only are they more likely to be born
onto a benefit, but they are more likely to have a very
young mother who will have difficulty raising her child away
from the sort of environmental risks that result in teenage
parenthood in the first place; a dysfunctional family life,
alcohol and drug abuse, family violence, transience, and
crime. A strong correlation exists between the
over-representation of Maori children on welfare and their
marked predominance in many other negative statistics
surrounding poor health and low educational achievement.
Being born onto a benefit does not set them up for
life.

Read the full article HERE

___________________________________________________New
Zealand Centre for Political Research www.nzcpr.com

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